Your fiRm Needs a Computerized Line-Boring Machine Which Costs $80,000

question 168

Multiple Choice

Your firm needs a computerized line-boring machine which costs $80,000, and requires $20,000 in maintenance for each year of its three year life. After three years, the salvage value will be zero.
The machine falls into the Class 10 equipment category (CCA rate 30%) . Assume a tax rate of 34%
And a discount rate of 10%.
Assume the machine can be sold for $10,000 at the end of year 1. Compute the present value of the
Pre-tax salvage value at the end of year 3.

• A) $10,000
• B) $7,513
• C) $6,600
• D) $8,616
• E) $9,678

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Definitions:

Delta Waves

Slow brainwaves predominantly present in deep sleep, associated with healing and regeneration in the human body.

Non-REM Sleep

The part of sleep that is divided into stages 1 through 3, characterized by gradual decrease in movement and responsiveness to the environment.

Third Stage

Refers to the final phase of labor in childbirth, which involves the delivery of the placenta.

Paradoxical Sleep

Another term for REM (Rapid Eye Movement) sleep, characterized by active brain waves, rapid eye movements, and vivid dreams.